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now that we have understood the concepts of leverage in forex letamp;#39;s talk about margin since the trader is allowed to use more capital than the amount he or she deposited the broker requires an amount of funds to cover any potential losses this amount is what we call margin see it is a good-faith deposit represented as a percentage it is the amount you need to have in your account in order to keep a position open letamp;#39;s look at this example a trader deposits twenty thousand dollars in an account with leverage one to twenty five the broker has set the margin at four percent what does this mean if the trader buys too lots of euro US dollar at 120 you can calculate the margin like this he must have nine thousand six hundred dollars in his account in order to keep his open position simple weamp;#39;ll be getting into balance and equity next before we come back to margin so stay tuned you